US-based coal miner Peabody Energy has announced its financial results for the first quarter, posting net revenue of $1.54 billion, down 5.52 percent, and an adjusted EBITDA of $166 million, falling six percent, both year on year.
According to Peabody, seaborne metallurgical coal fundamentals are in the process of rebalancing, with supply expected to decline approximately 10 million mt on further North American curtailments and stable Australian exports. Approximately 20 million mt of announced production cutbacks are expected to be realized this year, and more supply reduction announcements are likely in response to current prices.
In addition, capital spending remains extremely constrained, and the company believes that a significant increase in metallurgical coal prices will be required to incentivize new investment. Seaborne metallurgical coal demand is anticipated to improve on rising steel intensity per capita. New coastal steel plants are being constructed in Asia and are expected to require more than 30 million mt of seaborne metallurgical coal by late 2016.